ASX confirms blockchain delay
Australian capital markets operator ASX claims more user testing and development is needed for its blockchain tech switch, delaying its implementation by up to six months to midway 2021.
First mover advantage frustrated
Sticking to its original start date would have made the Oz capital markets clearing system one of the first industry players to adopt blockchain. The delay is extended by 3-6 months to March-April 2021 from the last quarter of 2020. The move to blockchain by ASX has attracted some trenchant critics.
Not so impressed – McConnell
Last year in a withering review of the plans Patrick McConnell, honorary fellow of the Macquarie Applied Finance Centre, said the move “has so relaxed the constraints of pure Blockchain, that it clearly demonstrates the limits of this technology rather its success. This ‘Blockchain-Lite’ not only fails to achieve most of the claimed benefits of DLT, it actually adds costs and risks for market participants”.
He added: “Since the ASX solution will be ‘permissioned’, i.e. restricted, a product, such as IBM/MQ, running over a secure VPN (Virtual Private Network) would appear to provide all of the functionality required by the ASX, and what’s more – it works already. Why reinvent the wheel?”
Significant savings claimed
In ASX’s annual report the capital markets operator stated it hoped to save $23bn by opting for distributed ledger tech (DLT). So these claimed savings are on hold – for the moment. ASX’s blockchain move has been in development since early 2016.
The ASX Clearing House Electronic Subregister System (CHESS) system runs as before. “We have listened carefully and have made modifications to the new scope and implementation plan,” said ASX. “With these revisions ASX is confident that a successful market-wide implementation of the CHESS replacement system will now be achieved.”
It added: “We do not underestimate the challenge to replace CHESS and transition the market to the new system. ASX’s dedicated CHESS replacement project and technical account management teams will support users through this critical industry-wide change program.”